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To achieve sustained growth of your property management business (not just grow the number of properties) you should live by the 'Rule of the 5 Ss' in property management.
1. Structure
- Is your staffing structure going to cope with accelerated growth?
2. Systems
- Is the rent roll running like a well-oiled machine?
3. Strategy
- Is there a clearly defined set of goals, dates and strategies?
4. Service
- Do you provide a different or better service than your competitors?
5. Standards
- Is the performance of the rent roll and the individual team members accurately and regularly measured?
Structure
What is the best staffing structure to have?
Answer
There is no BEST or RIGHT staffing structure. There have been differing opinions for decades as to whether the most efficient structure should be pyramid, portfolio or some combination of the two.
Some experts believe the best staffing model is to employ property managers who have the total responsibility for all aspects of the leasing and management of clients' properties, including a responsibility for growing the rent roll.
This model has some attraction due to the 'holistic' nature of the property manager's role and the fact there would be a wide variety of duties undertaken by the property manager.
However, it is my view, that leasing and rent roll growth are now specialist areas that require different types of skills to that normally required of property managers. In a nutshell, today's property manager is primarily an administrator, while leasing and business development require a high level of SALES skills.
Systems
Accelerated growth without efficient systemisation is like trying to win the Sydney to Hobart Yacht Race in a row boat without a map - you'll sink not long after you start.
To claim any sort of efficient systemisation of your rent roll, you would need to be able to answer "yes" to all of the following questions:
1. Do you have an up-to-date, written "procedure" for every repetitive process in your office?
2. Do you have corresponding office "policies" for every procedure in your office?
3. Do you have a matching set of checklists for each procedure in your office?
4. Do you have a full set of standard letters/templates for landlords and tenants?
5. Do you have a detailed set of job descriptions with key performance indicators for the property management team?
6. Is there a set of checks and balances in place measuring individual performance and to ensure consistency of service in property management?
If you answer "no" to any or all of these questions, then getting your rent roll efficiently systemised should be your FIRST project when you finish reading this article.
Strategy
What's your plan for property management for the next 3, 6 and 12 months? Once again, using the Sydney to Hobart Yacht Race analogy, would you set off in the race without a plan, a map and a compass?
Sadly, most property management offices I have been into attempt to grow their businesses without a documented strategy. And they wonder why their businesses don't go anywhere, except around in circles.
You do not need to be an MBA to develop a plan for a property management business. Nor do you need some complicated multi-page business plan with SWOT analyses and the like. A one-page business plan with bullet points is just fine.
However, what you plan should have is at least the following:
• Your goals
• When you will achieve them
• How you will achieve them
Service
What do landlord clients find frustrating about dealing with property management businesses?
• Lack of communication
• Errors in rent statements
• Unauthorised maintenance
• Unnecessary delays in leasing vacant properties
• Phone calls/emails not returned
• Staff turnover
• Dealing with too many people in the management process
• And the list goes on....
What do tenants find frustrating about dealing with property management businesses?
• Lack of communication
• Discourtesy
• Unnecessary delays in maintenance
• Errors in accounting for rents received
• Phone calls/emails not returned
• Staff turnover
• Dealing with too many people in the management process
• And the list goes on....
Recognise a trend here?
When a landlord or tenant complains about the service provided by your agency, what aspect of your service is it most frequently about? Communication.
So, you need to understand what landlords' and tenants' "hot buttons" are if you are going set the foundations of accelerated rent roll growth by providing world-class service.
There are four main things a client wants to know about your service:
1. What are the benefits to me?
2. How much will it cost me?
3. When can I get it?
4. Do you really care about me?
Standards
There are two types of standards that are critically important in the ability of an agency to accelerate growth in property management:
1. Customer service standards
2. Personal performance standards (key performance indicators)
Customer service standards
In the past, there have been perceptions by both landlords and tenants that the quality of service delivery in property management has been substandard or inconsistent. The best way to overcome this perception is through the development of a detailed set of customer service "standards" or benchmarks.
The purpose in the development of customer service standards is twofold:
1. To establish a set of minimum service delivery levels. In other words, everyone in the property management team agrees to, and is required to provide a level of service not less than the established service standards.
2. To provide agencies that use and abide by these service standards, with an opportunity to attract more new business compared with agencies that have no established service standards.
In considering whether to implement these service standards, it is important for you ensure you have the willingness of all property management team members to take "ownership" of them and abide by them.
